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GOOD CORPORATE GOVERNANCE
Dr. Bertram, the motto of this year’s financial report is “Responsibility is in our nature.” What does this mean to you?
Symrise has always assumed responsibility: for its employees, for the neighbors of our sites and for the people who invest in our company and buy our shares. We considered this the right thing to do because we want all our stakeholders to share in the company’s success. We greatly expanded this commitment more than ten years ago, focusing on sustainability at an early stage because it is very much in our own interest. Our products depend on nature and we must commit to sustainability for this reason alone.
This is not easy when the world is facing many other challenges. How did Symrise perform in 2023?
We are in the same position as many other international companies in that we are greatly affected by geopolitical events. They have had a large impact on our supply chains and, coupled with high inflation and currency translation effects, this has more than halved our organic growth. Nevertheless, we were able to grow our sales organically by 7.9 %, thus exceeding our target of between 5 % and 7 %. This makes us the absolute leader in our industry.
You are aiming to achieve sales of between € 5.5 and 6 billion by 2025. Are you sticking to this target?
We remain committed to this target in light of our performance in the past fiscal year and we’ve set ourselves a new mid-term target for 2028. By then, we intend to achieve sales of € 7.5 to 8 billion, at the same time maintaining our margin.
What makes you confident you can achieve this growth?
We are continuing to pursue our strategy based on the three pillars of growth, efficiency and portfolio, and this is linked inextricably to our sustainability targets. Our growth has two drivers. On the one hand, we are growing organically, for example, in the luxury fragrance sector, where we continue to develop and manufacture exciting new products for our global customers. The same applies in the body care, fragrance products, food and beverages, pet food and oral care businesses. At the same time, we have expanded our expertise and the basis for our activities through new acquisitions. For example, we have increased our stake in US company Kobo, a manufacturer of inorganic UV filters. This acquisition is enabling us to accelerate the implementation of our growth strategy for cosmetic ingredients. We have also increased our stake in Swedencare to 42 %.
As a result of these acquisitions, the portfolio is shifting further away from the traditional flavors and fragrance businesses in which you built your career. Why are you doing this?
We were the first in our industry to start making sensible additions to our core businesses. At the same time, this was the first step in the transformation toward the use of natural, sustainable and traceable raw materials. We are moving fast in this. Whereas around 10 % of our business was outside Flavor and Fragrance in 2008, it is now more than 30 % – and our new target is for half of sales in 2028 to be achieved outside our traditional business. This diversification was and is critical to our success. It is enabling us to access entirely new markets and sales potential, putting our business on a broader footing. At the same time, though, we are also relying on future markets, which we analyze for the opportunities they harbor for us. One way of doing this is by using the trendscope study for the food and beverages industry: Great benefit for the future. We use similar market and consumer research tools in other areas of the company.
For example, we are increasing our use of artificial intelligence to optimize our fragrance compositions.Dr. Heinz-Jürgen Bertram, CEO
Can you give an example of one of these future markets?
Instead of pet food, we now talk about pet care, which also includes dietary supplements and preventive healthcare solutions. This is evidenced by the investment in Swedencare, for example. The company is growing strongly and is aiming for sales of € 400 million by 2026. Its portfolio includes oral care products for dogs and food products to control weight or improve mobility. Vegan protein sources for pet food are another focus because many dog and cat owners who are vegan themselves want to feed their animals in the same way. The pet market has been growing for years – and we are growing with it.
You mentioned preventive healthcare and are aiming to increase healthcare solutions in the Taste, Nutrition & Health segment. How did you come to this decision?
For years, our portfolio has included solutions such as cranberry extracts, which have a scientifically proven benefit and a positive effect on the urinary tract. We are now consolidating our knowledge of bioactives in a unit with its own strategy, vision and leadership and a dedicated team (see Healthy development), which will be working intensively in this area where we see enormous growth opportunities.
What other fields of innovation are you addressing?
One trend is personalization. You just mentioned healthcare, for which we are developing probiotics, prebiotics and postbiotics. Our microbiome research is also delivering products tailored to individual users. The same applies to care and cosmetic products and to food. Thanks to our natural products, our portfolio holds the best solutions in all these fields.
This shows that Symrise products are the result of a lot of research and development. Why don’t you move into easier markets and applications in order to increase sales?
We focus on sustainable products that also deliver healthy margins in the long term. That is why we only acquire companies that match our profitability level of around 20 % or that we can take to that level within three years. This cannot be achieved with mass products that have no specific underlying know-how. At the same time, innovation has always been in our blood. We are now seeking to strengthen our innovative capability with the IGNITE program that aims to accelerate research and development (see Faster, higher, farther). Or, specifically, we are growing our AgroScience activities to investigate the methods of farming, harvesting and processing plant-based raw materials (see From the field to the laboratory and back).
Symrise is very international with more than 100 locations worldwide. There is a trend toward deglobalization in some industries. Is that also affecting you?
The markets are still extremely volatile and the use of digital marketing channels is growing significantly. We need to prepare our organization for this and develop a certain degree of flexibility. However, we will continue to internationalize our business because we want to be close to our markets. It is the only way to really understand consumers and the specific characteristics of individual regions. At the same time, we procure our raw materials from all over the world. Some 90 % of these are natural in origin. In order to monitor these materials, ensure their availability and purchase sustainably, it’s important to be present. This is something we demonstrate in many instances. For example, in Madagascar, we work very closely with the small farmers that supply us (see As holistically as possible).
The pet market has been growing for years – and we are growing with it.Dr. Heinz-Jürgen Bertram, CEO
You just mentioned digitalization. How is this affecting Symrise?
It’s helping us to meet our customers’ expectations. For example, we are increasing our use of artificial intelligence to optimize our fragrance compositions. The fundamental decisions are made by our perfumers, but we can make the upstream process more efficient by using AI to suggest certain parameters during fragrance development. However, these innovative technologies aren’t only helping us in product creation. In the years ahead, we will be applying them to a growing extent in increasing efficiency – the third pillar of our corporate strategy. To this end, we will be implementing digital solutions in production and our supply chains, for example. That is how we aim to become more efficient.
Let’s now turn to the company’s internal development. You’ve made a number of changes to the Executive Board. Why?
At the start of the year, Dr. Jörn Andreas took over as head of the Scent & Care segment, which I was in charge of temporarily for a year-and-a-half. He previously headed the Cosmetic Ingredients division. His appointment makes optimal use of our management resources. The company is growing fast and there is a lot to do. This is also the case in the Human Resources and Legal department, which is now headed by Dr. Stephanie Coßmann. She was previously a member of the Board of Management and Labor Director of Lanxess AG and will be shaping our human resource strategy for the future (see From service provider to strategic business partner). With this strategy, we aim to attract the best talents and develop our employees.
The most important change on the Executive Board will be the transfer of CEO responsibility to Jean-Yves Parisot. What should we expect from the change?
In fact, after 21 intensive years with the company, 19 of them on the board and 15 as CEO, I am retiring at the end of March 31st. I am proud of the things we accomplished together during these 21 years: Symrise has grown. Continuously and profitably. Today, Symrise stands for ingenuity, the very highest quality and absolute reliability in our industry. This is primarily the result of the hard work done by our tremendous team. It was an honor to lead this team during these eventful years. Now is the right time to pass on the baton. Symrise will be in the very best hands under the guidance of Jean-Yves Parisot. We have known each other for years. I have the utmost respect for him both as a manager and a human being. He was one of the key architects of Symrise’s far-reaching strategic focus in recent years. You can expect continuity from him. But it is also clear that my successor will set new priorities. And this is exactly as it should be.
We’ve talked about the present and the future, but the past will also play a big role in 2024. It was 150 years ago that chemists Wilhelm Haarmann and Ferdinand Tiemann first synthesized vanillin in Holzminden, thus laying the foundation for Symrise. How important is this for you?
Our history is very important to us because it’s a story of inventiveness and responsibility. Symrise was created in 2003 from the merger of Dragoco and Haarmann & Reimer, two Holzminden-based companies with long traditions. In 1874, Wilhelm Haarmann collaborated with Ferdinand Tiemann to develop a process for manufacturing vanillin from the sap of conifer trees, matching the natural flavor of vanilla. He established the company one year later. Dragoco, on the other hand, first saw success in fragrances in 1919. Both companies were pioneers in their fields and industry leaders from the start. We are building on this heritage through our sustainable and successful research and business activities.
EBITDA margin1 achieved by Symrise in 2023.
€ million sales were generated by Symrise in 2023.
is the stake in Swedencare.
1Adjusted for one-time effects